Posts in category: Articles

Article originally published in the Philadelphia Business Journal on October 11, 2016

This presidential election campaign is none like any other. Never has one candidate continued to make comments and take positions that are the antithesis of the values that most all Americans hold dear.

Donald Trump raised the issue of Hillary Clinton’s erased emails during last night’s debate, which she acknowledged was a mistake. If elected, Trump threatened to appoint a special prosecutor to investigate Clinton’s actions and put her in jail. Only in dictatorships are political opponents thrown in prison. This doesn’t happen in democracies.

The bombshell release on Oct. 7 of taped comments by Trump in 2005, in which he makes lewd, offensive and derogatory references about women only adds to the dozens of objectionable comments made by Trump during this presidential campaign.

Recently revealed banter between Trump and Howard Stern on Stern’s radio show about Trump’s sexual exploits reveal his total lack of respect for women, including his own daughter. His comments go way beyond “locker room talk” that he claims it was and that some Trump apologists use to excuse him.

During the debate, Trump raised the issue of Bill Clinton’s affairs to deflect attention away from his own actions. However, Donald is not running against Bill.

Presidents set the tone at the top for the country, just as CEOs set the tone at the top for their companies. Trump is CEO of his company. Effective CEOs don’t say things that Trump has, and neither do presidents.

On June 13, I wrote an article headlined, “Values matter and Trump has crossed the line. What should Republicans do?”

My article was based on Trump’s verbal attacks on women, his making fun of a disabled reporter, broad-brushing Mexican illegal immigrants as criminals, and his attack on Muslim immigration.

Trump has stated that federal judge Gonzalo Curiel should recuse himself from overseeing the Trump University case due to bias, because Curiel’s parents were born in Mexico. He has stated that he knows more about how to defeat ISIS than our generals. Oh really? I could go on and on.

Ethical CEOs don’t stiff their smaller contractors who performed work on their hotels and casinos as Trump has because they don’t have the financial staying power to sue, a stunt he wouldn’t pull on larger contractors with deeper pockets. Would Trump be an ethical president?

One can only wonder about the tone and culture within the Trump organization and what Trump’s employees must think about his ethics and his disrespectful and lewd comments about women as well as his personal exploits. I would hope no one within his company considers him to be a role model.

After Trump’s latest comments denigrating women were made public, many Republican politicians announced they could no longer support Trump. There is a growing chorus asking him to step down as the Republican presidential candidate.

The number of conservative newspapers endorsing Clinton continues to grow. Their non-support of the Republican candidate for president is unprecedented. Trump is doing significant damage to the Republican Party, which is not in our country’s best interest.

In that June 13 article, I wrote, “The value system of our leaders matter and Trump does not represent the values nor has the temperament of the individual to lead the United States.”

Four months later, I feel even more strongly about what I wrote.

It’s one thing to not support candidates because one disagrees with their policies. It’s quite another to do so because they are not fit to hold the position.

Day by day, Trump further demonstrates that he lacks the emotional intelligence, temperament and values needed to lead the United States.

I would not trust Trump as our president.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on October 3, 2016

Chairman and CEO John Stumpf of Wells Fargo, CEO Heather Bresch of Mylan Pharmaceuticals, and former CEO Martin Shkreli of Turing Pharmaceuticals were recently in the unenviable position of being asked to testify before congressional committees on issues involving unconscionable actions by their companies.

It is no fun being in the hot seat in an unfriendly environment covered by national and international news organizations, as well as by social media.

Stumpf testified in front of the Senate Banking committee on Sept. 22 and in front of the House Financial Services Committee on Sept. 29. He was grilled on why, over a five-year period, Wells Fargo (NYSE: WFC) could not fix a toxic incentive-driven and unethical sales culture in which bank branch employees signed up customers for credit and debit cards they didn’t need and opened new bank accounts in customers’ names without their knowledge.

Some Wells Fargo employees who reported these abuses to the company’s Ethics Line were fired. Whistleblowers are protected from termination by the Sarbanes-Oxley and Dodd-Frank Acts, a violation that can carry up to a 10-year prison term.

Congressman Patrick McHenry (R-NC) asked Stumpf, “How can you rebuild trust? What standards are you holding yourself to, that sends a message to the rest of the folks in your organization that look to you for leadership and guidance? What are you doing to restore that [trust]?”

Stumpf did not have a satisfactory response.

Bresch of Mylan Pharmaceuticals (NASDAQ: MYL) appeared before the House Oversight and Government Reform Committee on Sept. 21 to explain the latest of 17 EpiPen price hikes to $609 for a package of two injectors, a 550 percent price increase over the past decade.

In August, as criticism of Mylan’s latest price hike of EpiPen mounted, Bresch stated, “I am running a business. I am a for-profit business. I am not hiding from that.”

This was an insensitive and arrogant comment to individuals who someday will need to use EpiPen to immediately counter a life-threatening allergic reaction but can’t afford it.

During the House Committee hearing, Rep. Gerald Connolly (D-Va.), commented to Bresch, “You virtually have a monopoly and use it to your advantage, but unfortunately, it is at the expense of people who need [your product].”

Shkreli testified before the House Oversight and Government Reform Committee on Feb. 4 and faced tough questioning about why Turing Pharmaceuticals raised the price of Daraprim from $13.50 to $750 per pill soon after the drug was acquired. This pushed the drug out of the financial reach of many patients. Daraprim is used to treat toxoplasmosis, a disease that weakens the immune system of people who have cancer or are HIV positive.

At a Forbes Healthcare Summit, Shkreli stated, “I probably would have raised the price [of Daraprim] higher … and made more profits … this is a capitalist society, capitalist rules, and my investors expect me to maximize profits, not to minimize them … [like we] are all taught in MBA class.”

Oh really? This is taught in MBA class? Let’s hope not.

The public, through their elected officials and government regulators, give businesses a license to operate. That license can be changed to stop abusive actions. Was this taught in Mr. Shkreli’s MBA class?

In my Feb. 17 article headlined, “Former pharma CEO Martin Shkreli tarnishes the image of his profession,” I wrote, “on rare occasions, corporate leaders lose sight of a major principle in business and in life. When they take an action that … is unreasonable or egregious, or act in a way that is disrespectful or with disdain, their behavior will come back to haunt them and [hurt the reputation] of their company.”

Stumpf, Bresch and Shkreli give CEOs a bad name. They are supposed to set the right tone and culture, as well as the moral and ethical compass for their companies.

Boards need to hold their CEOs accountable for tone and culture in addition to financial results.

No board wants its CEO to be called in front of a Congressional Committee to answer for their company’s egregious behavior.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on September 26, 2016

Over the past few days, it has become evident that within the Consumer Banking Division of Wells Fargo, the culture is even more toxic than has originally been reported.

In a Sept. 21 CNN Money article headlined, “I called the Wells Fargo ethics line and was fired,” reporter Matt Egan writes that the news organization spoke with a number of Wells Fargo employees who were fired for reporting unethical practices on the ethics hotline and to the bank’s human resources department.

These unethical practices consisted of opening more than 2 million bogus accounts in customers’ names as well as selling products to customers they didn’t want or need, driven by a financial incentive system run amok.

Former Wells Fargo employees confirmed to CNN Money the bank’s practice of firing employees who reported unethical practices.

Egan spoke with a former Wells Fargo human resource manager who said, “The Bank had a method in place to retaliate against tipsters … It could be as simple as monitoring the employee to find a fault, like showing up a few minutes late on several occasions.”

A former employee who spoke with CNN Money was banker Bill Bado, who “refused orders to open phony bank and credit accounts.” He called the ethics hotline and notified human resources. Eight days later, he was fired for being late to work.

The Wells Fargo document titled “Our Code of Ethics & Business Conduct, Living our Vision & Values” states, “If you’re faced with an ethical dilemma and you’re not sure what to do, ask these questions: Is it legal? Does it comply with our policies? Is it consistent with our values? Is it consistent with our long-term goals and interests? Would I be comfortable with my decision, if it’s made public?”

During his testimony to the Senate Banking Committee on Sept. 20, Wells Fargo CEO John Stumpf said, “Each team member, no matter where you are in the organization, is encouraged to raise their hands … we want to hear from them.”

Certainly, Wells Fargo’s actions are not consistent with its policies or the words of its CEO.

Quoting from Wells Fargo’s ethics document, “When you contact the Ethics Line, the interview specialist will listen … and then write a summary report of the call. The summary will then be provided to Wells Fargo for assessment and further action. The Audit & Examination Committee of the Board oversees the investigation of concerns raised about accounting, internal accounting controls, or auditing matters.”

It is common practice for an audit committee to hear all hotline reports, not just those about “accounting, internal accounting controls or auditing matters.” Was the unethical and fraudulent behavior at bank branches reported to the Wells Fargo Audit and Examination Committee? If not, what board committee were those Ethics Line calls reported to? What actions did the committee take?

In a Sept. 24 article in The Wall Street Journal headlined, “Wells Fargo Taps Law Firm Amid Calls for Pay Clawbacks,” Emily Glazer writes that the bank has hired Shearman & Sterling to provide advice on clawing back compensation awarded to Stumpf, President Timothy Sloan, and Consumer Banking Vice President Carrie Tolstedt.

Glazer also writes it’s reported that “there has been tension among directors over following ‘good corporate governance’ versus the ticking clock the board faces to move quickly on the matter, given public calls for changes.”

The board must chart a new path going forward. Stumpf, as well as those who took part in the retaliation against whistleblowers need to be replaced. The board must ensure that the culture within the bank changes. Wells Fargo must regain the confidence of its employees, investors, government regulators and the public.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on September 23, 2016

Sen. Elizabeth Warren skewered Wells Fargo CEO John Stumpf when he appeared in front of the Senate Banking Committee earlier this week. Stumpf deserved the skewering.

Warren accused Stumpf for not holding himself accountable for the unethical sales culture at the bank’s retail branches, which put intense pressure on bank employees to cross-sell products and open as many as 2 million accounts customers did not ask for or need. These actions generated fees for the bank, which boosted earnings and its stock price.

Warren reminded Stumpf that he has often said, “I am accountable.” Warren asked how?

“You haven’t resigned, you haven’t returned a single nickel of your personal earnings, you haven’t fired a single senior executive,” the senator from Massachusetts said at the hearing. “Instead, evidently your definition of ‘accountable’ is to push the blame to lower level employees who don’t have the money for a fancy PR to defend themselves.”

Wells Fargo fired 5,300 of these employees over five years, but did not fire the senior leader of Consumer Banking, Vice President Carrie Tolstedt, the individual responsible for setting the tone at the top and organizational culture within her operating unit. She resigned in July, but is still with the bank until year-end.

During the Senate Banking Committee hearing, Warren referenced portions of the Wells Fargo vision and values statement. An excerpt states, “We believe in values lived, not phrases memorized. If we had to choose, we’d rather have a team member who lives by our values than one who just memorizes them.”

I guess that this values statement doesn’t apply to employees working at bank branches selling retail customers products they don’t need.

Quoting a statement by Stumpf from the Wells Fargo website, “Integrity is not a commodity. It’s the most rare and precious of personal attributes. It is the core of a person’s — and a company’s — reputation.”

Stumpf has not lived up to this statement. Does he have any credibility left with Wells Fargo employees? With customers? With legislators or bank regulators?

Stumpf has often stated that unethical actions were committed by only 1 percent of his employees, as if that was no big deal. It continued for more than five years. Why was no action immediately taken during this time to reimburse customers for the fraudulent fees they were charged?

On Sept. 16, a class action was filed against Wells Fargo on behalf of the customers who were defrauded by the bank. More suits will follow, as will investigations by regulatory authorities.

Where was the Wells Fargo board during the past five years as the fraudulent practices continued? Why was Stumpf not held accountable for tone at the top and corporate culture?

What actions did the board audit committee take when it heard from the bank’s internal auditor about these unethical practices, year after year?

Stumpf serves as both chairman and CEO of Wells Fargo. There are now calls for a stockholder resolution at the next annual meeting to split the roles. A strong independent lead director can ensure that employees of the bank, including the CEO, are held accountable for unethical and fraudulent actions.

Stephen Sanger, has served as the independent lead director on the Wells Fargo since Jan. 2012. He is the retired CEO of General Mills and is an experienced director, having served on numerous boards. It would be interesting to hear from him on how the board held Stumpf accountable for the unethical practices of the Consumer Banking Division over the past five years.

On Sept. 22, Stumpf resigned as the San Francisco appointee to the Federal Reserve’s Federal Advisory Council.

Now Stumpf needs to also resign as CEO of Wells Fargo and leave the board.

Will the Wells Fargo board ask for his resignation?

Stumpf’s inability to stop these unethical and fraudulent business practices and hold the senior leadership of Consumer Banking accountable undermines his ability to lead Wells Fargo. He will not be an effective CEO of the bank moving forward.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on September 19, 2016

Every day we learn more about how Wells Fargo & Co. violated the trust of its customers through unethical sales practices. If you can’t trust your bank, who can you trust?

In a Sept. 8 press release about the Wells Fargo scandal, the Consumer Financial Protection Bureau stated, “Spurred by sales targets and compensation incentives, employees boosted sales figures by covertly opening accounts and funding them by transferring funds from consumers’ authorized accounts without their knowledge or consent, often racking up fees or other charges. According to the bank … employees opened more than two million deposit and credit card accounts that may not have been authorized by consumers.”

Wells Fargo (NYSE: WFC) has been fined $185 million and ordered to reimburse customers $5 million in fees they were charged due to these unethical practices.

A Wall Street Journal article by Emily Glazer on Sept. 16 is headlined, “How Wells Fargo’s high-pressure sales culture spiraled out of control.” The article is sub-headlined, “Hourly targets, fear of being fired and bonuses kept employees selling even when the bank began cracking down on abuses.”

This article describes a deeply embedded culture in which lower level managers told their employees to ignore orders from senior Wells Fargo managers to stop abusive sales practices. Many Wells Fargo employees at retail bank branches chose to quit rather than do their jobs in an unethical manner.

The bank announced that it has terminated 5,300 employees who were involved in these sales practices over the past five years. What does a company do when a toxic culture is so embedded that it has such a difficult time changing it?

Wells Fargo has announced that it is suspending sales goals for those employees within its retail bank branches. It has also suspended the practice of cross-selling, in which customers are often sold many of the products and services the bank offers, even if they are not needed.

How did this toxic culture get established at Wells Fargo and how will the bank change this culture? Those will be the questions Wells Fargo Chairman and CEO John Stumpf faces when he testifies in front of the Senate Banking Committee this week.

Prior to her retirement in July, Carrie Tolstedt was the senior vice president of Consumer Banking at Wells Fargo where the abuses occurred. During the last five years, her compensation continued to rise. It is not apparent that her performance reviews and compensation were adversely impacted by her unit’s continued unethical sales practices. In what way did Stumpf hold her accountable?

When Tolstedt’s retirement was announced, Stumpf praised her as “one of our most valuable Wells Fargo leaders, a standard-bearer of our culture, a champion for our customers, and a role model for responsible, principled and inclusive leadership.”

This is a strongly supportive statement about a leader whose unit within the bank is now front-page news for violating the trust of its customers. Didn’t Stumpf realize that the bank’s retail branch employees who feel pressure every day to act unethically would feel no support from the bank’s CEO?

What can CEOs and board members learn about the Wells Fargo scandal that has damaged the company’s reputation?

Ensure your company’s value statement is more than just words on paper, and don’t ignore a toxic culture. It only gets worse and becomes harder to change.

Be aware that some employees may sacrifice ethical standards to generate large bonuses and face pressure by their bosses to do so. Put in place controls to ensure this does not occur. The reputation of your company and the trust of your customers depend upon it.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on September 9, 2016

Sunday marks the 15th anniversary of 9/11, the day of the worst terrorist attack on our country. Each year I write and share my reflections on that day.

Two hijacked aircraft flown by terrorists destroyed both World Trade Center towers. A third aircraft caused significant damage to the Pentagon. A fourth aircraft was brought down by courageous passengers in a field in central Pennsylvania before it could reach its target, possibly the Capitol Building.

The war on terrorism has certainly changed since 9/11. Those who want to harm us no longer highjack aircraft and use them as weapons as members of the terrorist group al-Qaida did on Sept. 11, 2001. ISIS is the new foe in the war against terrorism, on the ground in Syria and Iraq as well as in our own cities, where individuals and small cells of terrorists attack to create fear and havoc.

No one can ever forget where they were at 8:45 am on 9/11. As then CEO of PQ Corp., I reflect on how that day impacted me and my employees.

I was at the Greenbrier Hotel in White Sulphur Springs, West Virginia attending a board meeting of the American Chemistry Council. After a staffer entered the meeting and handed a note to the chairman, his face turned white as he announced that a plane had hit the North Tower of the World Trade Center.

We all gathered around a TV just outside the meeting room and watched with horror as a second plane hit the South Tower. It was then immediately evident that the United States was under attack.

As then CEO of PQ Corporation, my first thought was for the safety of our employees and those traveling away from home. Our company operated in 19 countries, and it was not uncommon for many of our employees to be traveling within their respective countries and between countries around the world.

I called my executive assistant and asked that she learn if any of our employees were on those four flights or were visitors to the World Trade Center towers or the Pentagon that day. I also asked for a list of employees who were on trips to or from the U.S., as well as employees on flights scheduled to pass over the continental U.S. I knew that it would be days before these employees could reach their business destination or home.

I wanted to return to corporate headquarters as soon as possible. Since all flights were grounded, my wife and I drove our rental car seven hours to Valley Forge. We stopped twice — once for gas and once to get something to eat.

The genuine concern and connection offered by the people who reached out to us at both stops was nothing like we have ever experienced. They wanted to know where we had started our trip and where we were heading. They provided advice on the route we should take, and long-haul truckers made recommendations on the best places to eat along the way. I thought that this is a small slice of America at its best — strangers showing concern for travelers passing through their communities.

When I arrived home that night, I learned that all PQ employees were safe. I received a report indicating the location of those employees in travel mode. Our travel department had already arranged hotel rooms for those who could not arrive at their destination.

Rental cars were reserved for those who could drive home. Two of our plant operations managers drove from Los Angeles to Chicago, where one lived, and the other continued on to Philadelphia. The administrative assistant of our purchasing manager was on her honeymoon in Europe. Our travel department was able to get her and her husband on a flight back to the U.S. a few days later.

What do I recall as the “best personal experience” of the horrible tragedy of 9/11 and the days that followed? It’s that we all pulled together as a nation and we had genuine concern for each other.

I recall the brave first responders in New York and Washington who saved countless lives at their own peril. I recall those first responders who made the ultimate sacrifice. I recall those brave passengers who resisted the hijackers over a field in Pennsylvania and prevented an additional catastrophe.

I recall the generosity of PQ employees who contributed funds to help the victims’ families. I recall attending the hockey season’s opening game of the Philadelphia Flyers in October, where there was not a dry eye in the house when our national anthem was sung.

I recall visiting the site of the World Trade Center a month after 9/11 to pay my respects, walking on hallowed ground. I will never forget these experiences.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on September 6, 2016

Andy Grove, former chairman of Intel Corp., coined the phrase, “Only the paranoid survive.” Grove has given us a timeless lesson on the need for a company to be paranoid about staying ahead of the competition and anticipating market trends.

Many companies don’t realize that there may be a current or new competitor out there targeting their customers.

Through innovation, these competitors are developing an improved product or service, creatively disrupting manufacturing or application technology, adding new product features, significantly lowering costs, creating a new channel of distribution, or changing the industry’s business model.

They are developing new products or delivering new services that customers don’t yet know they need. They are providing a great customer or client experience.

The goal of these competitors is to gain a competitive advantage and become the preferred provider of a product or service at your company’s expense.

Uber saw an opportunity to provide the traditional taxicab market with an on-demand car service that leverages a device most of us carry — an iPhone or Android smartphone. Founded in 2009, Uber developed a mobile app for requesting and paying for car service through the convenience of a smartphone.

To state that Uber has been widely successful is an understatement, especially with its expansion to many cities around the world. Other companies such as Lyft operate on a business model similar to Uber’s.

Taxicab companies were not paranoid about the potential effects of a new business model built on information technology. They were asleep at the wheel. The prices of taxi medallions have crashed, indicating the huge impact that Uber and similar companies have had on the taxicab industry.

Uber now faces competition from Google in a segment of the market — carpooling. Google will initiate a ride-sharing service in San Francisco called Waze Rider, based on the Google app Waze. Google’s service connects people going to destinations in proximate vicinity of each other. Another example of the use of information technology to disrupt a market.

From 2000 through 2008, Blackberry owned the global personal digital assistant (PDA) market, focused mainly on business users by providing wireless email communication in addition to mobile phone capability. Carrying a Blackberry was somewhat of a status symbol back then.

Both Apple and Google saw an opportunity to develop the consumer market for PDAs. Apple introduced the iPhone in 2007, followed by Google, which licensed its Android operating system in 2008 to PDA manufacturers such as HTC and Samsung.

Both Apple and Google encouraged independent companies to develop apps that greatly enhanced the user experience, a strategy that Blackberry was late in pursuing, and they never really caught up. Apple and Android saw an opportunity to develop the consumer market and they exploited that opportunity.

Blackberry ignored the competitive challenge of Apple and Android. Did they think that business users would not want to take great photos and then send or text them, or surf the web?

As Apple and the PDA manufacturers using the Android operating system captured market share, Blackberry watched in disbelief as they lost their dominant industry position.

CEOs, learn from Uber, Apple and Google and what other innovative companies can do to your industry. Remember, only the paranoid survive. Being paranoid is not only a defensive strategy, but an offensive strategy as well. Be the company that disrupts the market, even if it disrupts your business. Rather it be you than someone else.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on August 29, 2016

Mylan CEO Heather Bresch has joined the unenviable club of pharmaceutical executives who have attracted the wrath of the public, media and members of Congress, all of whom are concerned about the affordability of life-saving drugs.

Mylan has again increased the price of its auto-injector EpiPen, a device that an individual can use to self-inject an emergency dose of epinephrine in the event of an allergic reaction to various foods or insect bites.

The price of a package of two EpiPen auto-injectors is now $609, a 550 percent increase over the past decade.

Why do pharmaceutical companies raise the prices of their life-saving drugs beyond the point that consumers can afford? Because they can, especially if effective marketing makes it the preferred drug by physicians who prescribe it, even if a generic version of the drug exists.

Consumers are exposed to the cost of a drug to the extent of their prescription insurance co-pays and deductibles. The bulk of the cost is paid by their insurance company, which passes that cost on to all us through higher insurance premiums.

In defense of the EpiPen price increases, Bresch stated, “I am running a business. I am a for-profit business. I am not hiding from that.”

Her statement could not have been more arrogant and insensitive to individuals who someday will need to use EpiPen to immediately counter a life-threatening allergic reaction.

There is a generic alternative to EpiPen — an auto-injector called Adrenaclick, which contains the same drug, epinephrine. Depending on one’s insurance plan, Adrenaclick can be purchased at various pharmacies at a price significantly below that of EpiPen. Like many alternatives, Adrenaclick is prescribed less often than the well-known brand EpiPen. More doctors need to prescribe Adrenaclick.

In response to the blistering criticism of the EpiPen price hikes, Mylan has now offered 50 percent savings cards to reduce EpiPen’s cost to consumers. In a statement, Bresch said, “We recognize the significant burden on consumers from continued, rising insurance premiums and being forced to pay the full list price for medicines at the pharmacy counter.”

Bresch’s statement lacks sincerity after her “I am running a business” comment. Unfortunately, consumers who do not have insurance or who are covered by Medicaid will not be able to take advantage of the savings card for EpiPen.

Other countries set limits on what pharmaceutical companies can charge for drugs, which is usually a fraction of what is charged in the U.S. In effect, American consumers are subsidizing the world when it comes to drug prices. But having price limits on drugs is not the solution to high drug prices in the U.S.

The best solution is a marketplace with a high level of competition, preferably at least three providers for each drug. Government officials should be focused on eliminating delays by the FDA in the approval of generics.

Hillary Clinton has proposed that the cost to advertise to consumers no longer be tax deductible. Clinton has also proposed that for certain drugs, exclusivity end sooner than it currently does.

Pharmaceutical companies need to realize that the public, through their elected government officials, grants their industry a license to operate. Government officials can make changes to that industry’s license if doing so will benefit the public.

Bresch is right when she states, “I am running a business.” She should act that way and realize that the threat of government intervention is a higher risk than she thinks it is.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on August 22, 2016

Much has been written about how a business create s a sustainable competitive advantage : It’s done through differentiation.

And providing a great customer experience is an important way to differentiate your company from its competitors.

You may question how providing a great customer experience would make a competitive advantage sustainable. If your competitors stepped up their game and also provided a great customer experience, wouldn’t that negate your competitive advantage?

The fact is that many companies don’t provide a great customer experience. Their CEOs don’t recognize the competitive benefits of doing so. A company may state that this is its goal, but it may only be lip-service.

In the past, I have written articles about large corporations that have provided a great customer experience and those that have not. I want to share with you an experience a friend recently had with a small family-owned company that responded immediately to her problem.

She called me about a broken skylight that was raining shards of glass all over her kitchen. Heavy rain was expected that evening, and she was in near panic because she didn’t know who to contact to temporarily cover the skylight opening.

I immediately thought of Chuck Goss, the president of Cooper Roofing Inc., the company that replaced the roof of my home four years ago. His crew did a terrific job installing a new roof, so I called Goss and asked if he could assist my friend.

Within an hour Goss had one of his crews go to her home, clean up the glass shards in her kitchen and place a temporary plywood cap on the skylight before it started to rain. This is what providing a great customer experience looks like.

My friend was delighted by how quickly and professionally Cooper Roofing responded to her problem. Now, don’t you think that she will be sing ing the praises of Chuck Goss and his company, Cooper Roofing, to all of her friends?

Goss has grown Cooper Roofing into a major provider of new roofing and roof repair services in the mid-Atlantic region of the U.S. by providing a great customer experience to both residential and commercial accounts. Quoting Goss, “It’s not hard to build a great reputation when you focus on the needs of the customer.” This is his mindset, and that of his employees.

I have had similar experiences with the contractors I use at my primary and vacation homes. I don’t hire contractors unless they are recommended by a friend who received a great customer experience from them. If they provide us with a great customer experience, my wife and I refer them to our friends, who in turn refer them to their friends. What a great way to build a business — through satisfied customers.

Whenever you are unsure of what a great customer experience looks like, put yourself in the place of the customer. How would you like to be treated?

To build a sustainable advantage, provide a great customer experience, one customer at a time, and make this part of the DNA of your company’s culture. This is an important path to growth for your company.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on August 15, 2016

Many of us have worked in or been affected by organizations in which leaders ignore the brutal facts of reality. When reality finally catches up with them, any credibility they once had is damaged, along with the trust and confidence of those who rely on their judgment.

A recent example is the Flint, Michigan water crisis.

On Jan. 23, I wrote an article in the Philadelphia Business Journal headlined “The Flint Water Crisis: A failure in leadership,” describing the government’s continued indifference and inaction in addressing complaints by the citizens of Flint, about the quality of their tap water after the city’s water source was changed to the Flint River.

The water from the Flint River is very corrosive, causing lead and other heavy metals to leach out of the aging pipes delivering water to homes. It is estimated that as many as 12,000 residents of Flint now have elevated levels of lead in their bodies. Many of these are children who may suffer developmental issues and a range of other health problems.

The failure of government and regulatory authorities not to require the addition of the anti-corrosion agent was a gross failure in stewardship and responsibility, which could lead to criminal charges and civil liability. There is a lot of finger-pointing within the government and the EPA, with enough blame to go around. Some of those individuals responsible have been forced to resign.

Many Flint residents complained about the color and odor of the water coming out of the faucets in their homes. What did government officials do? They continually told the citizens of Flint that the water used in their homes was safe.

They ignored the brutal facts of reality. If these government and environmental officials experienced the same type of water coming from the faucets in their own homes, corrective action would have been demanded and immediately implemented.

In a July 2015 email, Michigan Gov. Rick Snyder’s then chief of staff, Dennis Muchmore, wrote, “These folks are scared and worried about the health impacts and they are basically getting blown off by us (as a state, we’re just not sympathizing with their plight).”

One wonders how many lower-level government employees wanted to address the Flint water issue as soon as it was known, but the culture within Gov. Snyder’s administration would not permit them to do so.

Within our own organizations, we rarely will encounter situations with the gravity of the Flint Water crisis. However, we all know of adverse situations that are not promptly addressed for a variety of reasons.

Perhaps a leader within your company becomes wedded to a strategy because she doesn’t want to admit responsibility for the adverse result. This forces her direct reports to support that strategy, which damages their own credibility within the organization.

When you don’t face the brutal facts of reality, problems can’t be fixed. Others within the organization roll their eyes in disbelief. Eventually, the brutal facts of reality must be faced. Do so early and maintain your credibility within your organization. If you make a mistake, don’t blame others, which destroys trust and respect. Acknowledge responsibility and share how you will make changes going forward.

This is a true measure of an effective leader.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the Philadelphia Business Journal on August 8, 2016 (Updated on August 25, 2016)

You were just appointed CEO at a new company. The press announcements have been singing your praises, outlining your previous positions, expertise and track record of results. The employees at your new company are wondering about your leadership style, your tone at the top and what changes you might make to the culture and strategy, as well as changes to the senior leadership team reporting to you. Your board of directors will be wondering the same thing. What you say and do will be watched intently by everyone within the organization. Expectations that you will move the company forward will be very high.

Your first 100 days as CEO is a time for listening, for asking questions and for forming impressions. Get to know the company. Talk with your board members and the individuals reporting to you, as well as those individuals reporting to them. What was the tone at the top and organizational culture under the previous CEO? The context of the comments by board members and employees will depend on how the previous CEO departed – retirement, a performance issue or a change in the company’s ownership. Judge these comments in an appropriate manner.

Does the company have a strategic plan, and are the various businesses within the company and the company’s functional areas pursuing strategies to achieve the plan? Has the company performed a SWOT (strengths, weaknesses, opportunities and threats) analysis? Is the strategic plan written to act on the SWOT analysis results: build on the company’s strengths, minimize the impact of its weaknesses, exploit its opportunities, and defend against its threats?

What is the competitive position of the company’s various businesses vis-a-vie their competition? How active is the competition in attacking the company’s markets with new product offerings or aggressive product pricing? Does the senior leadership team know why its customers buy from the company, and why other customers buy from its competition? Is this knowledge known throughout the organization, so every employee, even those who do not directly touch the customer, can perform their jobs in a way to strengthen the company’s competitive advantage and deliver a great customer experience?

What is the cost position of the company in its markets? How competitive is the company’s process and IT technology? Are the employees committed to continuous improvement? Is the ethos of the company to be on a journey to be the best in the world at what it does? Do all employees and board members buy into and share ownership of this ethos?

How strong is the profitability and cash flow of the company and how much debt is on the company’s balance sheet? Is the company capital intensive, and are there major capital projects on the horizon? What is your signature approval level for capital projects beyond which you will need to take a capital project to the board for approval? What is the signature approval level of your direct reports, and are you comfortable with it?

What are the leadership styles of the senior managers of the company? Can they execute and deliver results? Do they micro-manage their employees, or do they empower them to make decisions so they have a feeling of ownership in what they do, and can develop as leaders? Are employees allowed to take risks, and do they know how to de-risk their decisions? Do some of your direct reports need to be changed?

How does the board operate, and what are their expectations of you, the new CEO? What level of information detail do they require to oversee the company? How much experience does each have as a board member? Do they tend to drift beyond oversight and governance and get into operational issues, which is the responsibility of the CEO?

While you are learning about the members of your senior leadership team and their leadership styles, they are learning about you and your leadership style. Develop a good working relationship with all your direct reports as well as the members of your board by building trust. Ask questions for understanding, and don’t make commitments you may not be able to keep. Set expectations, so your direct reports will know what is important to you.

You should also spend time focused externally, speaking with major stockholders and customers. What are their expectations? What would they like to see that’s different from the previous CEO?

This is a lot for you to learn as the new CEO, and it will certainly take more than 100 days to do so. After your assessment, you may want to change the culture of the company. When sufficiently knowledgeable about the business, you will need to discuss with the board the changes you want to make to the company’s strategic plan. It is critical that as CEO, you “own” the strategic plan, because you and your team will be held responsible for executing it. It is difficult to hold a new CEO responsible for achieving results unless they own the plan and its goals.

So, as a newly appointed CEO, spend your first 100 days getting to know your company and getting to know your people by asking questions and listening before making big decisions. This will be the expectation of your board members and your employees, and will form the basis of your credibility as you move the company forward.

Stan Silverman is the founder and CEO of Silverman Leadership. He is a writer, speaker and advisor to C-suite executives on business issues and on cultivating a leadership culture within their organizations. Stan is Vice Chairman of the Board of Drexel University and a director of Friends Select School and Faith in the Future. He is the former President and CEO of PQ Corporation. Follow: @StanSilverman. Connect: Stan@SilvermanLeadership.com. Website: www.SilvermanLeadership.com

Article originally published in the Philadelphia Business Journal on August 1, 2016

Throughout my career, I have watched the game of office politics play out in many organizations. Office politics can have negative implications for the people playing the game, their co-workers and the organization itself.

There are those who feel that the only way they can advance within an organization is at the expense of others – making themselves look good, while making others look bad. They deflect responsibility and often blame others, both peers and subordinates, for their own failures. They take undo credit for the success of initiatives beyond their contributions, and misrepresent the facts to cast themselves in a favorable light. They are usually good at “managing up.” To the senior leadership of the organization, they heap undo criticism of their peers. They destroy trust, and when trust is destroyed, the organization becomes toxic and dysfunctional.

I have often wondered why the boss puts up with the actions of employees who play office politics. Either they are blind to it or think that they will achieve better results than if the organization performed as a high performance team in which employees trusted each other. They are wrong.

Bosses will often try to counsel employees who play office politics to get them to change, with mixed results. The employee will often deny their destructive behavior. Many times their political behavior is due to their personality. They won’t change. That is who they are.

I have written extensively on the importance of tone and culture within organizations. Those managers who undercut their peers and play political games are setting the wrong tone and culture, which will be emulated by those within their group, undermining trust with employees in other groups. Silos are created and information is not shared, to the determent of the entire organization.

As part of every manager’s performance review, tone and culture need to be assessed. If the tone and culture are wrong, even if the manager is achieving results, the results are not sustainable.

Eventually, employees who play office politics are recognized for who they are and the damage they cause. They are either terminated, or depart on their own when their political gamesmanship has been uncovered and is no longer useful to them at their current company.

So, as an employee within an organization, how should you defend against those who are playing political games to undermine you?

There is an old saying, “Keep your friends close, and your enemies closer,” ascribed by some to Chinese general and military strategist Sun Tzu in his book “The Art of War” (circa 400 BC), and by others to the 16th century political philosopher Niccolo Machiavelli in his book, “The Prince.” This saying can also be applied to office politics.

By keeping your adversaries close, you can get insight into what they are doing and thinking. You also have the opportunity to sway their thinking, and show them that undermining you is not a productive use of their time. You may be able to co-op them, and get them to be one of your supporters rather than a detractor. However, once they violate your trust, you may never fully trust them again. Once lost, trust is very difficult to regain.

On various occasions during my career, I have been the subject of political attacks by others. Did I ever confront the individual? No. I felt that would be counter-productive. Whether or not to confront someone is a personal decision, and depends on each individual situation.

How did I successfully cope with these attacks? I built a strong informal organization through which I got things accomplished. I built alliances with others by helping them accomplish their objectives. Through these alliances, I was made aware of political attacks that were not visible to me. I did the same for those with whom I had developed alliances.

So, how can you rise above office politics? Meet your commitments to others. Build trust with your peers. Develop alliances. Keep your adversaries close. Build political capital. Most importantly, do your job and achieve results, and let those results speak for themselves.

Stan Silverman is the founder and CEO of Silverman Leadership. He is a writer, speaker and advisor to C-suite executives on business issues and on cultivating a leadership culture within their organizations. Stan is Vice Chairman of the Board of Drexel University and a director of Friends Select School and Faith in the Future. He is the former President and CEO of PQ Corporation. Follow: @StanSilverman. Connect: Stan@SilvermanLeadership.com. Website: www.SilvermanLeadership.com